Ocwen Successfully Extends Corporate Debt Maturities to December 2020 and December 2022
December 05 2016 - 9:55PM
Ocwen Financial Corporation, (NYSE:OCN)
(“Ocwen” or the “Company”), a leading financial
services holding company, today announced the completion of the
settlement of the previously announced Exchange Offer by its
subsidiary Ocwen Loan Servicing, LLC (“OLS”) pursuant to which OLS
issued $346.9 million aggregate principal amount of 8.375% Senior
Secured Second Lien Notes due 2022 (the “New Second Lien Notes”) in
exchange for $346.9 million aggregate principal amount (or 99.1%)
of Ocwen’s 6.625% Senior Notes due 2019 (the “Existing Notes”) that
had been tendered in the Exchange Offer. The Exchange Offer
was purely a debt-for-debt exchange offer and none of OLS, Ocwen or
any of their subsidiaries received any cash proceeds from the
transaction.
Ocwen also announced that concurrently with the
closing of the Exchange Offer, OLS entered into a new Senior
Secured Term Loan Facility (the “SSTL”), with an initial interest
rate of 6.0%. The SSTL provides for a $335 million term loan
credit facility with a maturity date of December 5, 2020, and is
refinancing the prior senior secured term loan that had a maturity
date of February 15, 2018 and an interest rate of 5.5%. The
SSTL refinancing was predominantly a debt-for-debt refinancing and,
after allowing for payment of expenses on both transactions and
original issue discount on the SSTL refinancing, none of OLS, Ocwen
or any of their subsidiaries received net cash proceeds from these
transactions.
“We are very pleased to have successfully completed
these two important refinancing transactions,” commented Ron Faris,
President and CEO.
The SSTL and New Second Lien Notes are jointly and
severally guaranteed by Ocwen, Ocwen Mortgage Servicing, Inc.,
Homeward Residential Holdings, Inc., Homeward Residential, Inc. and
Automotive Capital Services, Inc. (collectively, the
"Guarantors"). The New Second Lien Notes and the related
guarantees will be unsubordinated obligations of OLS and the
Guarantors, respectively, and will be secured (subject in each case
to certain exceptions and permitted liens) by a second-priority
lien on the assets of OLS and the Guarantors that secure the SSTL
(the "Collateral"). The lien on the Collateral securing the New
Second Lien Notes will be junior to the first priority lien
securing the SSTL.
The New Second Lien Notes have not been registered
with the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Securities Act"), or any
state or foreign securities laws. The New Second Lien Notes may not
be offered or sold in the United States or to any U.S. persons
except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities
Act.
In the settlement of the Exchange Offer, OLS
delivered the Total Exchange Consideration of $1,000 principal
amount of New Second Lien Notes for each $1,000 principal amount of
Existing Notes that were validly tendered in the Exchange Offer,
including Existing Notes that were tendered after the Early Tender
Date of 5:00 pm on November 15, 2016.
About Ocwen Financial
Corporation
Ocwen Financial Corporation is a financial services
holding company which, through its subsidiaries, originates and
services loans. We are headquartered in West Palm Beach, Florida,
with offices throughout the United States and in the U.S. Virgin
Islands and operations in India and the Philippines. We have been
serving our customers since 1988. We may post information that is
important to investors on our website (www.Ocwen.com).
Forward Looking Statements
This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. These forward-looking statements may be
identified by a reference to a future period or by the use of
forward-looking terminology.
Forward-looking statements by their nature address
matters that are, to different degrees, uncertain. Our business has
been undergoing substantial change which has magnified such
uncertainties. Readers should bear these factors in mind when
considering such statements and should not place undue reliance on
such statements. Forward-looking statements involve a number of
assumptions, risks and uncertainties that could cause actual
results to differ materially. In the past, actual results have
differed from those suggested by forward-looking statements and
this may happen again.
Important factors that could cause actual results
to differ materially from those suggested by the forward-looking
statements include, but are not limited to, the following: our
servicer and credit ratings as well as other actions from various
rating agencies, including the impact of downgrades of our servicer
and credit ratings; adverse effects on our business as a result of
regulatory investigations or settlements; reactions to the
announcement of such investigations or settlements by key
counterparties; increased regulatory scrutiny and media attention,
uncertainty related to claims, due to rumors or otherwise,
litigation and investigations brought by government agencies and
private parties regarding our servicing, foreclosure, modification
and other practices, including uncertainty related to past, present
or future investigations and settlements with state regulators, the
CFPB, State Attorneys General, the SEC, Department of Justice or
HUD and actions brought under the False Claims Act by private
parties on behalf of the United States of America regarding
incentive and other payments made by governmental entities; any
adverse developments in existing legal proceedings or the
initiation of new legal proceedings; our ability to effectively
manage our regulatory and contractual compliance obligations; our
ability to contain and reduce our operating costs, including our
ability to successfully execute on our cost improvement initiative;
the adequacy of our financial resources, including our sources of
liquidity and ability to sell, fund and recover advances, repay
borrowings and comply with debt covenants, including the financial
and other covenants contained in them; volatility in our stock
price; the characteristics of our servicing portfolio, including
prepayment speeds along with delinquency and advance rates; our
ability to successfully modify delinquent loans, manage
foreclosures and sell foreclosed properties; uncertainty related to
legislation, regulations, regulatory agency actions, government
programs and policies, industry initiatives and evolving best
servicing practices; as well as other risks detailed in Ocwen’s
reports and filings with the Securities and Exchange Commission
(SEC), including its annual report on Form 10-K for the year ended
December 31, 2015 and its current and quarterly reports since such
date. Anyone wishing to understand Ocwen’s business should review
its SEC filings. Ocwen’s forward-looking statements speak only as
of the date they are made and, we disclaim any obligation to update
or revise forward-looking statements whether as a result of new
information, future events or otherwise.
FOR FURTHER INFORMATION CONTACT:
Investors:
Stephen Swett
T: (203) 614-0141
E: shareholderrelations@ocwen.com
Media:
John Lovallo
T: (917) 612-8419
E: jlovallo@levick.com
Dan Rene
T: (202) 973-1325
E:drene@levick.com
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